FDIC sues 3 banks over faulty mortgage-backed securities

Citigroup, US Bancorp now in the limelight

The Federal Deposit Insurance Corporation sued Citigroup (C) and US Bancorp (USB), along with the Bank of New York Mellon (BK), on Wednesday in an attempt to get back more than $695 million that it lost from selling shoddy residential mortgage-backed securities once owned by a failed Texas bank.

HousingWire reported on Wednesday that the FDIC was suing the Bank of New York Mellon, with two other bank names now getting added to that list.

In the Citigroup lawsuit, the last to be filed, the FDIC said it lost more than $200 million when it sold $420 million of Guaranty's securities in March 2010.

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The FDIC also reported more than $440 million of losses from selling $2.06 billion of securities overseen by Bank of New York Mellon, and more than $55 million of losses on more than $248 million of securities in the US Bancorp case.

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Brena Swanson is formerly the Digital Reporter for HousingWire. Brena joined the HousingWire news team in February 2013, also serving in the roles of Reporter and Content Specialist. Brena graduated from Evangel University in Springfield, Missouri.